The German chancellor Angela Merkel heads a weak coalition government held together by the awareness that any alternative would be more fragile still. Yet she commands the European stage without challenge. If Tony Blair was Europe's figurehead politician before Iraq, and Jacques Chirac afterwards, since 2005 that role has been captured by Merkel. To the rest of the world, she is us.

Fifty years after the signing of the Treaty of Rome, this is historically appropriate. It was Germany's destructive potential that defined the 20th-century Europe the treaty aimed to replace. But it is Germany's constructive potential that also defines, to a degree still misunderstood, the 21st-century Europe in which we now live.

As next weekend's European Union half-century shindig nears, it is fitting that the party will be taking place in Berlin, not Brussels. Germany is at the heart of any answer to the "Whither Europe?" question that is on minds and magazine covers this week. Germany's size, prosperity, geography and values - and, not least, its military - define Europe in ways that no other member state can rival.

To a greater or lesser extent, all modern European nations have evolved in apposition to modern Germany. This is certainly true of Britain. The dialectic that Britain has with Germany is as crucial to this country's role in the world as the one with America. In its way, the relationship with Angela Merkel matters as much as that with George Bush.

Nevertheless it must be years since any German leader was garlanded with the sort of praise that British parliamentarians of all parties showered on Merkel after the European energy summit in Brussels a week ago. The actor Edward Fox may continue to loathe the Germans, as he announced with pride in an interview in the Daily Mail on Thursday, but at Westminster on Monday it was springtime for Merkel and Germany.

Her agenda was bold and she carried it superbly, the prime minister told MPs when he reported on the EU-wide agreement to cut greenhouse gas emissions, boost renewables and set new goals for energy efficiency. She had achieved something that many thought impossible, agreed an approving Sir Menzies Campbell. Even David Cameron seemed beguiled. The Tory leader's complimentary remarks about the Merkel deal have been widely noted in diplomatic circles this week as hinting at a further step towards European pragmatism by the opposition leader. Hmm. Maybe.

More significant than Cameron's comments was what Gordon Brown said on Monday night. Europe's Brown watchers are itchy-twitchy about how Blair's inscrutable successor-in-waiting intends to play the EU. But Brown chose Monday to praise Merkel's vision in forthright terms, and to single out the unifying effect of her environmental initiatives for approval. It is rare for Brown to talk of his full commitment to Europe. Now Merkel has drawn those important words from him.

Do not exaggerate what this implies. The Brussels summit may suggest the end of the long post-referendum tristesse that has afflicted Europe since the rejection of the EU constitution by French and Dutch voters in 2005. But the sap is not rising for the kind of project that Germans instinctively favour. As Europe's leaders prepare to fly to Berlin, the question of what the EU is now for remains unanswered. Yet answered it must be if the union is to have a meaningful modern purpose.

How can this be done? Only with difficulty. Once again, much depends on Merkel. The immediate issue is what the leaders will say in the joint declaration in Berlin. The issue here is symbolic. But it tells us something about the EU's current predicament that Germany, which holds the rotating six-month presidency, is so aware of Europe's disagreements that it is refusing to circulate its draft (and the crucial translations) until the 27 leaders arrive in Berlin.

The uncontroversial part of the declaration will be about the real achievements of the past. As ever, these are under-recognised on our island. Nevertheless, the future is where real problems lie. Characteristically, Britain goes to Berlin wanting a short text containing few abstract nouns and nothing that sounds like a federalist shopping list. The key passage, not just for Britain, will be what the declaration says about the stalled constitution. A generalised reference to institutional reform is as much as our chaps want.

But Merkel wants more. She has a two-part strategy for restoring the EU under the German presidency: part one, environment and energy - done; part two, revive as much of the constitution as politically possible at the June 21 EU summit - work in progress. In her mind that means a smaller treaty with sections on rights and values, as well as the technocratic stuff Britain prefers that gets rid of the overlarge commission and the rotating presidency. But politically possible means politically possible in Britain as well as France and the Netherlands. This limits the scope of what Merkel can do. Nicolas Sarkozy is provisionally signed up for an initiative, which is one reason Berlin would prefer him to win the French presidency in May. Ségolène Royal wants something more ambitious. No one is sure about François Bayrou, the name now on everyone's lips.

And Britain? Blair wants to be there in June to sign a mini-treaty that would not trigger a French referendum. In those circumstances, he believes, there would be no need for the previously offered UK referendum either; parliament would decide and the EU would be ready to go on and rethink its budget and common agricultural policy in 2008. Brown is more cautious. With Labour trailing and a general election beginning to loom, the last thing he seeks is a long battle with the Daily Mail and the Murdoch press about denying the people a vote on Europe.

In a Europe with vision, Germany would retreat from the Helmut Kohl mindset that integration holds all the answers. Meanwhile Britain would advance from the Margaret Thatcher mindset that integration is always a threat. The two would meet somewhere in the middle and Europe could begin to serve its citizens better and to punch its true weight in the world. German officials report signs of serious movement on their side. Isn't it time for Britain to choose the bolder course on ours?